Is Apple the New Microsoft? An Anti-Trust Case Study

For many industry observers, news that antitrust enforcers may investigate Apple hearkens back to the late '90s during the zenith of
Microsoft's rein. At the time, Apple and other tech companies
complained that Microsoft exploited its monopoly over PC operating
systems. Now Apple is in the hot seat. The company's licensing agreement
with developers has come under scrutiny by federal officials for
preventing developers from using non-Apple software to make apps.
Officials also fear that Apple's advertising restrictions may give the
company's iAd service an unfair advantage. How similar is Apple's
dominance now to Microsoft's in the late '90s? Two veterans of the tech
world weigh in on opposite sides:

Apple Has Become the New
MicrosoftJoe Wilcox has covered Microsoft's
antitrust woes since 1997. He says the similarities between Microsoft
then and Apple now are striking:

The potential problems before
Apple aren't that different from Microsoft... If the Feds see 'cross
platform' as fostering competitive market and prohibiting the tools as
being anticompetitive -- and they see Apple as having a monopoly over
mobile applications -- then, yes, Apple could have problems.

1)
The Justice Department claimed that Microsoft had a monopoly on
Intel-based PCs. The DOJ never said all personal computers. Similarly,
the FTC or DOJ could argue that Apple has a monopoly on iPhone -- or
iPhone OS devices.

2) The Justice Department claimed that
Microsoft used its monopoly power to restrict third-party platform
access to Windows. The Feds identified Java and Netscape's browser as
competing platforms. ... Now Java is back, being
shut out on yet another computing platform. By restricting the
development tools to its own, prohibiting cross-platform tools and
favoring its own applications over third parties', Apple looks lots like
Microsoft did to Clinton trustbusters in 1997 and 1998.

Au
Contraire: This Is Different From U.S. v Microsoft Since the early
80s, Philip Elmer-Dewitt has obsessively covered Apple and the tech world. He says these two case
studies are markedly different:

The case against Microsoft was
launched after Bill Gates bundled a free Web browser (Explorer) into
Windows -- which had a market share at the time in the mid 90's -- cutting
off Netscape's air supply (to use the language of Microsoft's internal
memos) and driving it out of business.

Apple's doesn't enjoy that
kind of market share. Its slice of the U.S. smartphone market is smaller
than Research in Motion's (RIMM)
and Google's (GOOG) Android share is rapidly catching up. ...

Adobe (ADBE)
might -- and probably has -- filed a complaint against Apple based on the
damage Apple has done to its efforts to promote Flash as a
cross-platform development tool. And if the DOJ takes the case, it could
use the line of attack it used against Microsoft, arguing that the
"network effects" of the iPhone OS and the App Store tend to lock
customers into Apple's ecosystem, and that to create a level playing
field, the two businesses should be forcibly separated.

It didn't
work 12 year ago, and it's hard to see how it's going to work today.